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Yep. The Red Faction franchise is dead, at least for now, as confirmed by THQ CEO Brian Farrell in a speech to investors. When asked about the future of the Red Faction franchise, he said,

Given that that title, now in two successive versions, has just found a niche, we do not intend to carry forward with that franchise in any meaningful way.

He went on to confirm that the team of developers responsible for Red Faction will be working on the upcoming game Insane, which is being overseen artistically by director Guillermo Del Toro (Pan’s Labyrinth, Hell Boy 2, Blade 2), and has been described as “Lovecraftian” inspired.
Even though it’s over for now, it’s not impossible to think that the franchise may reappear in the future, given how much the gaming industry loves rebooting old franchises, but no promises! Hopefully Insane will satiate the bloodlust.